Charging Order? The myth

dawnyp64

Thankyou,Thankyou,Thankyou!!!! honestly,iv had the worst nights sleep because my solicitor informed me yesterday that my ex-partner's debt of nearly£14000 with Northern Rock,may need to be cleared leaving negative equity of nearly £4000 to deal with on the sale of the house.
The picture is this:i split with my partner 4years ago,havent heard from him at all.He has this loan(in his name only) which is now a CO on the house.Ive been paying the mortgage myself since we split up.Im selling the house now with only a couple of weeks to do so,or my buyer is pulling out (frustrated at the delays incurred by my solicitor) and my solicitor is in contact with the ex AND Northern Rock.

Ive spoken to N Rock (although they couldnt discuss too much with me as its not my loan,they said).I was told that my half of the equity would not be touched,just the ex's share....But my solicitor said yesterday (5oclock on a Friday!!) that its looking like all the equity may be used if my ex doesnt agree with N Rock payment proposal for repayment.
Ihave to thankyou all SO much for all the info youve put on here but if anyone has any other info that may be of help...please do so.In the meantime il get in touch with the LR to clarify a few things..(eggbox...you need to take this up for a living! youve been a lot more help than my dopey solicitor!!) THANKYOU!

fatbelly

Dawny - is your ex co-operating with the sale? Are you both using the same solicitor?

I think he's going to have to give a clear instruction to stick to the letter of the restriction. And the solicitor needs to understand that instruction.

eggbox

Dawnyp64

The first thing you have to make clear to your Solicitor, is that there is no legal obligation to pay Northern Rock anything from the sale of your property as their CO has only been allowed to be recorded as a "Restriction", as its jointly owned, which carries no right of payment when the property is sold (even from your Ex's share).

No Solicitor is going to be happy about being told their job but it has to be made clear to them that their legal obligation is to protect YOU as you are paying the bill!

NR's dealing with your Ex's loan repayment is, also, totally irrelevant to the sale of the house as the CO debt is registered against your EX's " Beneficial Interest" (any equity) and not the property itself.

Any claim they may have, can only come into force once any BI interest has been realised through any sale. They definitely DO NOT have any legal right to make any demands on your share of the Equity! A point you need to make CRYSTAL clear to your Solicitor by explaining you will be making a claim against him if he disobeys your instructions and pays ANY money from the proceeds of the house to NR.

You also need to be prepared for your buyers Solicitor to raising the CO/Restriction on your LR details and asking for it to be removed prior to the sale being completed. You need to explain that, in accordance with the the terms of the Restriction in place and LR rules, he only needs to notify NR (as the CO holder) that the property has been sold to his clients and this will enable the LR to alter the details for the property whereby the Restriction will fall away as being "Overreached".

Any resistance your "Dopey" solicitor may have can easily be brushed aside by getting him to contact the LR (as I did) who will confirm the above!

Good luck and PLEASE report back here as to what happens to your sale ok!

Sparklyfairy

Dawny, I really hate to say this, but I think you need to sack your solicitor. S/he has already informed NR that you're selling - I believe there is no real reason for a solicitor to inform the mortgage company of anything in a normal sale until AFTER the sale has taken place & they receive their money.

The key point is to find the knowledgeable solicitor then put the house on the market. Your current solicitor doesn't even understand the difference between a charging order & a restriction..so I doubt there will be much hope (if any) in them comprehending what this fully entails. I truly hope things work out, though.

dawnyp64

oh,honestly..im so grateful for all of your advice!!! im calling my solicitor tomorrow and put forward all of this information to him,as not one bit of it has he referred to,to me.
Sparkleyfairy..i have a buyer whos desperate to get this sale finalised,and the only stumbling block is this debt of my ex's.My sol has sent a redemption statement from Northern Rock to my ex,who as i understand it,has to agree to his 50% to go towards the debt..i have a letter winging its way to me with the same info (i presume for me to agree that whatever the amount go towards the debt).I will be discussing everything iv learned from this forum first tho(God Bless you all!)I only have until the 16th to get this issue sorted otherwise iv lost the sale,so i cant get another sol as this would cost me time.But youre right,he doesnt seem to have a clue..(he sent initial paperwork to my old address,where id left 2 months previous with the wrong surname for my ex!!).
Eggbox..im in contact with the buyer,so should i ask him to prompt his solicitor to contact NR re the property about to be sold to his client? can a CO be removed before the sale?
Fatbelly..my ex IS co-operating with my solicitor.I have no idea where he lives or any of his details but i text his sister who helped me out by contacting my ex to contact my solicitor.I understand the clear instruction needs to be made and kept to it,but it is upsetting because hes not listening to me.As i said,i had spoken to NR TWICE to clarify MY situation regarding the equity and the lady said my share would not/could not be touched.TWICE iv been told by my solicitor that all of the equity may be used,also stated that there will be negative equity (was told that on Friday).
I will be back on here tomorrow and update you all on what was said,along with the final outcome.I agree,people should say what the outcome was so others can learn from it.
Thankyou again everyone..youve been BRILLIANT!!
***..oh i think ive confused myself...just read that you cant sell a property with a restriction on.also,
the charge has to be paid off second to the mortgage,then the rest goes to the sellers,And
until that charge is paid off..it stays on the register and the creditor could,potentially,force a sale,even for the new buyer (if he was to agree to a sale witha restriction still attached??)
this is something that could put the cabosh on the whole sale,isnt it? but wouldnt the buyers solicitor make him aware of this?
sorry to be a pain,people...just really quite worried.

dawnyp64

well..iv spoken to LR,who wasnt that much help really..pretty much told me what iv found out on here..said that the restriction remains unless the loan is paid?
As for my solicitor,he agreed that everything i said was correct!!!...so why tell me all the equity could be paid towards the charge leaving neg equity? Im now waiting to see what NR have proposed to my ex(dublicate letter being forwarded to me),then see what his response is,but ive had it confirmed by my solicitor that even if my ex disagrees with NR proposals,it wont interfere with the sale...do you think NR know theyre lucky to be getting at least half of the equity so easily? Also,completing the form RX3,section 9 will request the restriction to be removed,whilst also confirming notice was given in writing to NR,as required by the restriction (by both /or buyers solicitor??)..not sure what NR would do in this scenario.
anyhow,i have now been informed by my solicitor,this should all be finalised by the end of the week!..fingers crossed!! watch this space,lol...

eggbox

dawnyp64

You need to simplify a few things in your mind as you are taking too much on board and its confusing the issue.

Firstly, explain to your Solicitor that you wish the sale to proceed regardless of any negotiatons between Northern Rock and your Ex and you demand that he ceases any futher discussion with NR regarding your share of the Equity, also.

You then reiterate that if he does pay any of your share to NR from the sale proceeds you will be suing him for the loss, as he is not legally bound to pay anything from your share, and you will also reporting his action to the Solicitors Regulation Society.

By all means contact the buyer's solicitor, but only to confirm that they know that when the sale has proceeded they need to contact NR AFTER the sale is completed to allow registration of their clients details at the LR. They DON'T need to contact NR prior to any sale being completed.

Regarding the LR information, ignore it as you will have spoken to the person who picked up the phone and not a Solicitor for the LR. I had this problem too, but I later had it confirmed in writing from a LR Solicitor that any "Restriction" becomes "overreached" when the property is sold to a third party for a cash value and can then be removed as long as the CO holder has been notified of the sale. (It's important to remember that NO time limit is currently set on the Form K Restriction meaning the creditor can be told of the sale AFTER it has happened!)

As I read it, you are going to be happy as long as you walk away from the sale with your share of the Equity? As long as you keep your Solicitor in check then you won't be disappointed. But you need to emphasise your instructions to him and make him aware you will be taking action if he doesn't follow your instructions that are perfectly legal to do.

Good Luck!

dawnyp64

Thankyou Eggbox..i went on to another forum and there seemed conflicting advice to what id got clear in my own mind..as i mentioned,when i spoke to my solicitor yesterday,he seemed to agree to everything i said..that its an INTERIM charge only,that its a restriction only,so NR can only have an interest in my ex's share only,and ARE NOT entitled to automatic payment,they have to apply to my ex once his share of the equity has been realised AFTER the sale(did i read on here that they have to make a legal claim for it too?)..I even asked him outright that this cannot interfere with the sale now at this stage and he agreed!! Honestly,if you could have listened in on previous conversations you would have thought none of this applied to my situation...ive learned so much over the last few days re CO?restrictions but im still holding my breath and wont take anything for granted til its all gone through!
Will keep you posted til the end result...thanks again!!

dawnyp64

well..it goes on..the buyers solicitor today has stated that its Eversheds (NR solicitors) that need to address the removal of the restriction with the LR.the thing is,they havent been dealing with the restriction for months having returned the debt back to NR!!!..so the buyers solicitor not only has the wrong info re restrictions but hasnt even got updated info re the debt!...this is very worrying as it seems i now have to deal with the buyers solicitor!..having a problem getting my solicitor to call me back too..have to keep ringing him,and he doesnt call back,and im still waiting for the duplicate paperwork mentioned last Fri..beyond frustrating!!

eggbox

dawny

You need to point out to Eversheds that NR only have a "Restriction" on the property NOT an Equitable Charge. Thereby, they have no legal interest in the property only in your Ex's potential profit from any sale (and yes they do have to make a legal claim to get hold of that too.)

Point out to them, also, that under the terms of the Form K Restriction NR have registered against your details at the LR, it is the job ob the person or their agent who is buying the property to notify the Restriction holder, and no one else, who then have to provide a certificate (proof) that they have done so to the LR to enable the details on the property to be changed.

Solicitors are as slippery as they come and they don't like being told what the law is or how to do their job by Joe Public. So you have to be precise and give them the correct info to back upo what you are saying. All of which is on this thread!